Wednesday, September 23, 2020

Khama foils plan to privatise BMC through the backdoor

President Ian Khama has foiled plans by some senior government officials to parcel out the Botswana Meat Commission (BMC) to themselves and their friends in and outside Botswana.

The plan, which was born from recommendations by Australian Consultants and backed by Minister of Agriculture, Brampie de Graaf, President Khama’s erstwhile advisor Nico Czypionka, a number of BMC board of directors and some powerful farming interests, involved stripping the parastatal and selling its pieces to some local and regional investors who had already lined up for the party.

According to the plan, first to be sold would be the Botswana Meat Commission UK based Marketing arm ÔÇô Allied Meat Importers, which was to be bought by a Namibian Afrikaner cattle baron whose name has been passed to the Sunday Standard.

Allied Meat Importers, based in Waltham Cross (Hertfordshire) markets and promotes the Botswana Meat Commission products under the ECCO brand.
The company also markets Swaziland Meat Industries products under the SIMUNYE brand.

Among others who stood to benefit from the BMC “strip and sell” plan were powerful farming interests led by a Ghanzi-based white cattle baron whose name has also been passed to the Sunday Standard. Under the proposed plan, Batswana cattle farmers would be barred from selling their cattle directly to the BMC abattoir as the Ghanzi cattle baron would be appointed the middleman between BMC and citizen farmers wishing to sell their cattle.

The questionable privatization, reminiscent of the Air Botswana one, however, started facing internal resistance when it was subjected to intense scrutiny. It is understood that then BMC board chairman, Botsile Gubago, started voicing dissent to the plan that was supported by the minister and other board members.

Gubagu was appointed BMC’s first non-executive Chairman in November 2005 on a four-year contract.

Gubago, an engineer by training, was replacing the ministry’s permanent secretary, Mathias Chakalisa, who had been acting as chairperson since parliament separated the function of the chairperson and the chief executive officer at BMC.

Gubagu, however, left the board earlier, sparking speculations that he had been frustrated out because of his opposition to the questionable privatisation.

The parastatal CEO, Motshodi Raborokgwe, who is also believed to be opposed to the plan, has also been on slippery ground. The board has been stalling attempts to give him a full contract and has been renewing the contract by only a few months in an apparent bid to frustrate him.

With opposition to the plan apparently flattened out, Czypionka then wrote to former president Festus Mogae, asking him to lobby his successor Khama to appoint him BMC board chairman. Such an appointment would give Czypionka a free hand to not only influence but also literally drive the BMC privatisation process.

President Khama, however allegedly threw out the plan following representations by Raborokgwe and Gubago.

The duo had pointed to President Khama that the envisaged plan would sideline all Batswana farmers and empower a few cattle barons and their expatriate friends.

The BMC saga harks back to the failed plan to privatize Air Botswana, which would have seen Czypionka become a central figure in what could have been the biggest privatization scandal in Botswana.

A reconstruction of his role in the privatization of Air Botswana portrays him as an ingenious deal maker who thought nothing of trampling the norms of doing business at the government enclave.

For example, while Cabinet and Parliament were poring over the 2003 Air Botswana Transition Act which provided for the registration of the national airline as a public company to be privatized as a going concern, Czypionka had other ideas.

He wanted Air Botswana to be liquidated and the proceeds used to buy shares in SA Airlink, a family owned airliner in South Africa.

In a paper he co-authored with SA Airlink CEO Roger Foster that he presented to Cabinet in April 2006, Czypionka proposed that the process should be speeded up so that it could be concluded by September 2006.

“This date would not only symbolically coincide with Botswana’s 40th anniversary of independence, but it would also facilitate adequate planning and change of management. The commencement of this arrangement would then also coincide with the start of SA Airlink’s financial year.”

The result of Czypionka’s advice was a statement by the then Minister of Transport, Lesego Motsumi, a few weeks later announcing the accelerated privatization of Air Botswana.

A number of international airlines were invited to submit their bids.
“It was always push, push, push, pressure, pressure, pressure” a source close to the Air Botswana privatization process said at the time.

“He [Czypionka] is someone who is very aggressive and on the edge.”
All things seemed possible. Czypionka’s brash style often clashed with the conservative culture of the government enclave, but a few key officials were drawn to his moxie and friendship with the Vice President.

To most Czypionka watchers, it thus did not come as a surprise when the ultra-hard right wing economist who had presented an unsolicited bid to Cabinet on behalf of SA Airlink was drafted into the Air Botswana Privatization Evaluation Committee, giving him a free hand to influence the bidding process.

Reputable international airlines, which had shown an interest in buying Air Botswana as envisaged by the Air Botswana Transition Act of 2003 pulled out of the privatization process and did not submit their bids because they allegedly felt that the process was stage managed and they were only called in to make up the numbers and legitimize a done deal by SA Airlink.

Among international airlines that withdrew their bids from the Air Botswana privatization were Ethiopian Airlines, Comair Ltd, a reputable South African courier, British Airways, ExecuJet Aviation Group, a Zurich Based air Charter Company, Inter Air South Africa and the Tourism Empowerment Group.

The Sunday Standard can further reveal that the airlines that were invited to bid for Air Botswana privatization had already been disqualified by Czypionka in the paper he had presented to Cabinet and were apparently invited to bid only to make up the numbers and legitimize the SA Airlink deal.

The “Concept paper for a Strategic Equity Partnership with the regional airline Airlink” that was penned by Czypionka and SA Airlink CEO Roger Foster which became a blueprint for the Air Botswana privatization, argues among other things that “having analyzed all regional airline operations, only Airlink fulfils ….the requirements- others fail mainly on the criteria of suitable aircraft and networks ÔÇô or they are existing competitors. A marginal candidate would be British Airways/Comair/Kulula, but this group operates only large jet aircraft, which are unsuitable for Botswana’s current requirements.”

In his concept paper campaigning that the strategic partnership between Air Botswana and SA Airlink should be speeded up, Czypionka argued that the national carrier is on its last legs and that “even with significant capital injection, Air Botswana will probably be badly hurt by open competition.”

The accelerated privatization of Air Botswana was, however, also facing internal resistance. It is understood that staff members voicing dissent to the airline’s accelerated privatization were systematically purged.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.